Making you more money, from more markets, more often. The boston matrix model, devised by bruce henderson, is a tool for assessing the market potential of products and services already in production, as well as ones in a more infant stage. Visit our marketing theories page to see more of our marketing buzzword busting blogs if you are working with a product portfolio you have a range of tools at your disposal to determine how each one or a group of the products are doing. It considers the degree of market share and market growth and helps identify where best to use resources to maximize profit from a product management perspective. The bcg matrix is used for the evaluation of a organizations product portfolio in. The composition of the portfolio can be critical tothe growth and success of the company. The growthshare matrix aka the product portfolio matrix, boston box, bcg matrix, boston matrix, boston consulting group analysis, portfolio diagram is a chart that was created by bruce d. Bcg matrix has four types of scenarios with respect to the market share of the company, cash flow generation and growth rate of the industry in which company is operating. This free ebook describes the boston matrix, an approach to product portfolio planning based on relative market share and market growth. Boston matrix free ebook in pdf, kindle and epub format. However, since they are leaders, they also generate large amounts of cash. Full form of bcg matrix is boston consulting group matrix. What i lover about mike is that he takes the time to actually show you with real examples and over the shoulder tuition.
Success and disaster sequences in the product portfolio. Copying and distribution of this pdf is prohibited without written permission. This is why the axes are often indicated with high and low. The quadrants of products according to the boston matrix. Contents introduction bcg matrix analysis of apple inc. The bcg matrix also known as the boston consulting group analysis, the growthshare matrix, the boston box or product portfolio matrix is a tool used in corporate strategy to analyse business units or product lines based on two variables. At the height of its success, the growth share matrix was used by about half of all fortune 500 companies. During the 1970s, the boston consulting group bcg 1973 developed an. The growth share matrix was created in 1968 by bcgs founder, bruce henderson. The boston consulting group developed a matrix for assessing the product lines of a company, called the bcg matrix. It is considered as the oldest and perhaps most renowned of all the matrices.
These are the products which are in high growth markets with a high market share. The matrix was popularized by the use of symbols mainly representing animals. The boston matrix is a popular tool used in marketing and business strategy. A business with a range of products has a portfolio of products. Matrix also known as the boston matrix is a very useful marketing tool in understanding portfolio management. Boston consulting group matrix bcg this technique is particularly useful for multidivisional or multi product companies. Bcg matrix is the term used in the context of management. Bcg matrix boston matrix strategy training from epm. The market share, potential for growth and annual sales are taken into consideration.
Boston consulting group bcg matrix is a common approach to managing a portfolio of different strategic business units sbus or major product lines. Since 1968, the bcg matrix, also known as the boston or growthshare matrix, is a tool to answer those questions by providing. Products in high growth markets with high market share. An analysis on bcg growth sharing matrix munich personal.
The boston consulting group bcg helps the business. They grow rapidly and therefore they use large amounts of cash. It is usually worthwhile to invest in a star because the revenue it brings in equals or exceeds the investment required. The boston consulting group matrix provides the recommendations for the development of strategic. The bcg matrix was created for the boston consulting group by bruce henderson in 1968. Bcg matrix also referred to as growthshare matrix is a portfolio planning model which is based on the observation that a companys business units can be classified into four categories. The absolute values of the axes are dependent on the line of business or industry. Analysis of a business product portfolio and the product. The boston consulting group matrix bcg matrix, also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firms brand portfolio brand equity in marketing, brand equity refers to the value of a brand and is determined by the consumers perception of the brand. Introduction to the boston matrix, classifying products and business units, stars, question marks, cash cows, dogs. In this article, we analyze products, but the bcg matrix can also be used to evaluate individual business units called strategic business units sbus or any other cashgenerating assets, such as property.
It was published in one of bcgs short, provocative essays, called perspectives. To develop the efficiency of marketing decision making, the bcg matrix plays an effective tool for strategic planning of product performance in industry and company level. Bcg matrix can be used to analyze sbus, separate brands, products or a firm as a. Bcg matrix of nestle bcg matrix analysis of nestle. Bcg matrix was a framework originally devised by boston consulting group to strategically measure the potential growth rate of a company within its industry versus its relative market share. The boston consulting group bcg helps the business organizations to develop their efficiency for the successful operation of their business activities. The boston consulting group bcg growthshare matrix is a planning tool that uses graphical representations of a companys products and services in.
The business units or products that have the best market share and generate the most cash are considered stars. The purpose of the matrix is to enable companies to ensure longterm revenues by balancing products requiring investment with products that should be managed for remaining profits. Lets check out the bcg matrix of apple and what all products of the company fall under what quadrant. Understanding the different quadrants can give crucial insights to. Cash cows predicts that the products are in low growth markets, and market. The bcg matrix or boston growth matrix is actually a box that basically helps you visualize see and organize business services and products based on a very simple box method. Ideally, there should be a balance of stars in rising markets and and cash. Once the product or service has been defined in the table below a relevant strategy can be applied to it. The bcg matrix is also known as the boston matrix, the growth share matrix or boston consulting group matrix.
Bcg matrix also known as the growthshare matrix is used by organizations to classify their business units or products into 4 different categories. A problem child is one of the four categories or quadrants of the bcg growthshare matrix. Bcg matrix boston matrix the bcg matrix growthshare matrix is a method that comes from the consulting company boston consulting group bcg, thus the name bcg matrix or boston matrix. The growth share matrix is a diagram of the normal relationship of cash use and cash generation. Boston consulting group matrix professional academy.
The strategy for products that have been designated as a question mark must either be focused on growth to turn the product into a star or on cost savings to turn the product into a cash cow. Although the concepts of cash cows, dogs, question marks and stars may described are used more widely in large business they may be applied to business of all sizes. The premise of the bcg matrix is that all products or brands can be classified as one of the following categories, based on its market share and market growth. The divisions or products compromise the organisations business portfolio. How to develop an effective seo strategy using theme cluster model. Cocacola is a multinational company that has been operating for over a century. Boston matrix product portfolio model business tutor2u.
The bcg growthshare matrix positions the various sbus product lines on the basis of market growth rate and market share relative to the most important competitor. Henderson for the boston consulting group in 1970 to help corporations to analyze their business units, that is, their product. The bcg matrix, developed by the boston consulting group, a leading management consulting firm, is the best known of these methods. Draw a box and then draw two lines, one horizontally across the middle, and one. The bcg matrix is based on the classification of sbus into question marks, stars cash. These products are so successful that their growth potential is really unknown. Product life cycles and the boston matrix product life cycle shows the stages that products go through from development to withdrawal from the market product portfolio the range of products a company has in development or available for consumers at any one time managing product portfolio is important for cash flow. There are tons of rumors of an apple tv product that might just maybe dominate like the ipodiphonei pad rising star the iphone and i pad are rising stars. How to use the bcg matrix smart insights digital marketing. The boston matrix is a model which helps businesses analyse their portfolio of businesses and brands. Stars shows that both, the growth markets and market share are in the highest position. An example that can be considered as a question mark in the bcg matrix. The market growth potential for that product or its business unit.
This is also known as the growth market share matrix by plotting these factors it is possible to identify which products or brandsunits a company should invest further in, and which products it. A companys business unit that has a small market share in a rapidly growing industry. The cocacola company quotes, from inca kola, a sparkling beverage found in north and south america, and samurai, an energy drink available in asia. The boston consulting group bcg matrix is a portfolio management tool created in 1970 by bruce henderson. The bcg matrix or boston matrix was developed by the boston consulting group in the late 60s as a way for companies to develop strategies for their different product lines. Profit maximiser is a brand new approach is on a far bigger scale to bonus bagging. The boston consulting groups product portfolio matrix bcg is designed to. Such terms as dogs, wildcats, star and cash cow subsequently came into business use, whereupon the boston matrix was referred to as the bcg zoo. Using the boston consulting group portfolio matrix to. Pdf bcg matrix, swot analysis and porter model sidhant. Bcg matrix explained smi strategic management insight.
Pdf an analysis on bcg growth sharing matrix researchgate. The growth share matrix or boston consulting group. The boston matrix is a more informal marketing tool used for product portfolio analysis and management, developed by the boston consulting group in the early 1970s. The boston consulting group bcg matrix is used in analyzing the various products being sold by manufacturers. Created by the boston consulting group, the bcg matrix also known as the boston or growth share matrix provides a framework for analyzing products according to growth and market share. The boston consulting group matrix is a well known tool for portfolio analysis. Normally, such products are about in balance in net cash flow. This paper looks critically at the history, mainly from public sources, of the development of the market sharemarket growth matrix by the boston consulting group and its popularization in both.
1431 160 719 914 144 514 625 845 359 343 1167 1467 48 1106 642 1485 377 1055 511 748 1469 1090 1458 1205 476 1122 996 50 321 1312 1291 967 446 272 1356 396 459 777 495 110 1465 750 1392 1320 824 1443